2017.11.2119:51:00UTC+00Swedish Krona Plunged to Crisis-Era Milestone

The Swedish krona has dropped past the SKr10 a euro milestone for only the second time since the 2008 financial crisis, as a firm euro, dovish central bank and investor uneasiness over the local housing market have weighed on the currency.

The currency notched a low of 10.016 per euro on Tuesday morning, before recovering to 9.89761.

The krona briefly surpassed the symbolic level in 2016, but has traded below 10 per euro for an extended period only during a certain extent of the financial crisis. The currency has been under pressure due to weak recent data on inflation and worries regarding a possible downturn in the housing market.

House prices have started to drop following its decades-long rally, which convinced analysts at Moody's to caution that a bigger correction might cause a wider economic slowdown.

Concerns about the housing market have a further impact on the exchange rate by making it less likely that the central bank of Sweden will risk hiking interest rates, which would make mortgages more expensive. The combination with weak inflation figures reduces the chances that the Riksbank will bring an end to its long-running monetary stimulus programme of bond-purchasing and negative interest rates.

The Riksbank is set to release its quarterly update on the Swedish economy's financial stability on Wednesday.